Friday, July 22, 2011

AAP May 2011 sales numbers are out in the most convoluted manner possible. So time for some graphs to elucidate. Note: This is 5 month data that I conveniently subtracted out the prior 4 months.

The quick summary:Ebook sales are at 292% of a year agoChildren's books are selling at about 130% of normalAdult paperback is selling about the historical normal.Adult Hardcover is selling at 2/3rds of normalMMPB is, at best, at 40% of normal sales.

We're approaching the mid-year spike of ebook sales. Ok, we're in it... July! Sigh... I'll have to wait 2 months for those numbers.

To the charts! Now my third and last chart will be variations of the same chart. Basically, we're seeing continued strong growth in ebook sales.

On the first chart, it shows the growth in ebook sales, by the AAP publishers, is far above an extrapolation of prior sales; that tells us the ebook market is still in a fast adoption timeframe.

Market share is something obsessed about and a bit difficult to understand with ebooks. What matters is that as long as sales (1st chart) exceed extrapolations of prior years, we know the ebook market will better than double its market share of the total book market:

Could you have imagined plotting total trade print sales versus ebook sales a few years ago? Now that ebooks are 26% of 'trade' (by my calculation), it is exciting seeing them on the same graph. I will repeat this graph at the end for an interesting conclusion...

Mass market paperback (MMPB) is getting creamed by ebooks. It was my favorite form factor as is the case with many (most?) 'serial fiction' readers. These are the readers that demand variety. Thus the best customers for indie authors. Thus the book form factor most reduced by ebooks to 40% of what it used to be (down from 50% last month)!

Hardcover is now being hit hard too. I wonder how much is do to "I want it now" which digital will always win and how much due to the excellent variety of fiction. Do recall these are AAP numbers... so part of the drop could be the new competition:

Adult paperback is doing ok. Not great after inflation, but not bad. Is this because so many paperback books are non-fiction?

Children's books are up! I suspect this is a snap back from a poor start of the year. Why doesn't matter. I'm happy to see this one category doing well. I do think it will be bowled over by touchscreen apps... But there is something nostalgic about kids reading. Alas, due to touchscreen apps, it isn't my family helping this category (we must have 600+ hand me down children's books):

Seasonal Charts I'm a big fan of looking at data graphed different ways to truly understand the data. In a seasonal industry, such as books, that means plotting each year's data as one line.

First is ebook market share. There is a definitive July and end/start of year peak with a two troughs in between. I'd like to know more about the July peak. For now I'll just report the data:

A bar chart lets us see the trends for each month. This chart screams 'fast ebook growth' with no breaks applied:

The seasonal chart on Adult hardcovers shows they have lost their mojo. I suspect with the Borders bookstore closing this trend will be downward. :( I don't want an end to paper, I'm just much more for ebook growth!

Paperback is plodding along. It is neither doing great nor poorly. As noted before, I suspect this is due to non-fiction sales holding out in pbook form better than novels.

The seasonal chart shows the accelerating decline of MMPB. :( I do not wish to go into more detail of my favorite print form factor than to note sales should be two and a half times higher than they were in May just to be OK.

The seasonal Children's chart raises a question: Did May sales just steal from the mid-year? Or was their a 'hot book' I missed a la Harry Potter? (Or did the PR on the movie sell a bunch more Harry Potter books?)

While there are starting to be seasonal patterns in ebook sales, the trend is clear, fast year over year growth!

I promised a return to this chart. I've noticed that a line drawn through December and the following May sales is the yearly trend. So what if I extrapolate ebook sales on a multi-year basis? We see the trend in trade drop below ebooks in 2013. I think the crossing will be earlier (due to continued ebook sales acceleration).

I'm excited for the growth in ebooks. I'm also very happy to see print holding up better than I expected. Nothing would be better than a straight growth of the book market. :) I'm very curious to see the data on July (mid-year ebook peak). I also think my prediction of 50% ebooks by end of January 2013 is quite safe.

Sunday, July 17, 2011

Indie authors do very well in the mid-list. I blogged before on poor mmpb sales. If you write serial fiction, romance, sci-fi, erotica, and a few other genres, the door is closed for most authors in these genres to go the 'big6 route.' If your foot isn't already in the door... I just do not see where the money is going to come from to support new authors.

Numerous old school authors are self-publishing their old works. Why wasn't this already done by the big6 (as much as legally possible)? Indie authors shouldn't fear the back list. Indie authors should cheer on the backlists coming to ebooks. Why? Further pull of readers to ebooks only grants a larger potential audience to new authors.

I do my own estimates of indie author sales... However, all indications are that I'm being too conservative. Does anyone have a good link on indie author market share?

Sunday, July 10, 2011

"Total unit sales of print books sold through the outlets whose sales are captured by Nielsen BookScan dropped 10.2% in the six month period ended July 3, falling to 307.1 million. Among categories, the biggest decline came in adult fiction with units off 25.7%, while mass market paperback had the steepest decline among formats with units down 26.6% in the period. BookScan totals cover about 75% of the outlets where print books are sold. For a more complete report, see Monday's issue of Publishers Weekly."

My latest charts support these numbers. But here is the deal... This isn't year one of the decline; it is year two. For MMPB, it is year #3 of the decline. So comparing YOY is a bit misleading.

I blogged before that MMPB is now below the necessary 'economies of scale' to survive as a form factor. :( I want pbooks to survive.

Besides fiction, so far ebooks have only 'gained traction' in IT related technical references and a few other non-fiction genres. But just as ebook adoption had certain genres as pathfinders, the same will be true of non-fiction. It is a question of what is the ideal hardware and some software updates (quicker access to the index and table of contents and better linking from those sources). Oh... and Search. I'm spoiled by the Chrome web browser's search. Amazon needs to improve the search on the Kindle; improvements that will probably require touchscreen.

Most of my friends with young kids are concerned about the weight of textbooks their children must lug around. More than a few went to the expense of buying 2nd sets of texts so there was never that panic ride back to the school locker. Now, more and more schools are putting the relevant text and homework online, at least here in Southern California.

What I post I do not post lightly. A friend of ours, through our older daughter, was laid off from a textbook related job recently.

South Korea is initiating a switch to ebook textbooks. Now, it wouldn't surprise me if South Korea is helping fund Samsung and LG to develop a better 'textbook tablet.' Oh wait, a country actually getting behind industry to help found a new industry? Wow...

I wonder how long it will take the US to follow? 2014 is a long way off...

Monday, July 4, 2011

I've over-used this link. It comes up again to point out why ereader growth will be excellent this holiday season. If you will, a rebuttal to the publisher FUD:

With the WSJ publishing another "beware the slushpile article," (ht JA Konrath's blog comments). Here is the deal, the #1 resistance is price.

I suspect for years to come the bulk of ereaders will be given as gifts. I really have trouble seeing gifts > $100 for anyone but a parent, close sibling, spouse, or child; let's call this 'group #1.' But many won't give > $100 gifts. Hence why I think the LeapPad is $99 (but the books are $25!).

For Nephews and nieces and a few others in what I'll call 'group #2', I can see $70 being a gift limit. For this group, 'with special offers' becomes practical; while with 'group #1' I suspect it would look bad to give a discounted gift 'with offers.' For many, $50 will be the limit for this group.

See Fig. 11 of my first link. Only 46% are willing to buy ereaders at today's prices ($139 w/o offers); that doesn't mean 46% of the potential has bought an e-reader (that will take while). I suspect for gifts, the 'willing price' drops a little for anyone not special enough in group #1, we'll see more price resistance. Per Fig. 11, ereader sales open the 'potential market' by ~80% at sub< $100 (46% to 79% is about 80% market growth); don't forget not all of the current market is an early adopter.

So we *need* that $99 Kindle/Nook in 2011. :) Honestly, I suspect $70 is the true price barrier. e.g. The dash alarm clock at its normal price of almost $100 isn't a great alarm clock. But at $70, it became my father's day gift. A similar 'price resistance' will be true with e-readers.

Citibank analyst is predicting 17.5M Kindles in 2011. I think, like every other Kindle sales estimate so far, that this prediction is going to understate the market.

Note: I expect the rumored Kindle tablet to really shake up the market. I *really* would be enjoying a device where I could blog in 'glaring light' right now. Mirasol or e-ink, I'm ready for a tablet with a bluetooth keyboard that works in light LCDs are 'washed out.'

I see a market splitting in multiple markets (as all mature markets do). IMHO, e-ink or other 'glare friendly' technologies will dominate reading devices. LCD is just too much an 'office light' device.1. Dedicated, cheap, and light e-readers. The 6" format will probably hold on. However, if the LeapPad's 5" works, I see no reason a smaller form factor won't be adopted at the lower price points. :) 2. E-reader phones at both the 5" and 7" form factor. IMHO, these devices are required for a fast boost to US e-reader adoption. 3. 7" and to a lesser extent (due to weight) 10% tablets utilized for dual purpose.

The less 'ideal' a reader, the more the device will be used for 'convenience reading' (e.g., I see this at the pediatrician and parks with smartphones) or by people who read less than 20 books per year who want a multi-purpose device.

Ereading will grow. Expect customers to be outside playing this time of year and not browsing for a new electronic toy. But as soon as the weather turns south...

Got Popcorn?Neil

psAnyone else suspect that ereading was granted a 'leg up' by the unusually long winter this year in the Northeast US?

About Me

I love to parent, read, ski, travel, and scuba dive. I've switched from blogging about real estate to ebooks. As much of an optimist as I've been on ebooks, their growth is typically better than my predictions! My main prediction is 50% ebook market share by end of January 2013.
Any of my charts may be re-used with just a link to this blog (blog or specific post is up to whomever borrows the graphs).
Neil